EUR/USD points to further consolidation between 1.10-1.14 – Danske Bank

Senior Analyst at Danske Bank Morten Helt sees the pair extending its sideline theme between 1.10 and 1.14 in the next months.

Key Quotes

“The focus in FX markets this week will be on central bank meetings in the US, Japan and Norway. With the sluggish US data, the case for a Fed rate hike this week has weakened substantially”.

“The market is pricing in just a 10% probability of a 25 bp rate hike by the Fed on Wednesday, while the likelihood of a hike in December is viewed as 50/50 by the market. With rates likely to be unchanged on Wednesday, the market will be looking for hints from the Fed on the outlook for rates”.

“We still believe the Fed will wait until H1 17 to raise again. Hence, most likely it will point to the need to monitor economic data before acting”.

“As such, there may not be major movement in EUR/USD on the back of this week’s meeting, unless the Fed is highly dovish or hawkish. We continue to expect the cross to trade in the ‘post-Brexit’ range of 1.10-1.14 in the coming months”.